Leadership: On the Firing Line

Great people can keep any company thriving, even in a sluggish economy. In a bullish economy, lots of mediocre people are able to fly high by glomming on to the momentum. But when times are tough, it's the self-motivated achievers who help companies not only survive, but outperform the competition and exceed their own expectations. It blows my mind when I hear the dictum, "No bonuses, and no increases, across the board." When I've been in those situations—dictated by the parent company—I've always found ways to get around the problem and reward my top performers.

Sander A. Flaum

MetLife's CEO, Bill Toppeta, recently told the Fordham Leadership Forum, "It's hard to be liked when you're the one telling an employee that his performance is not up to snuff. But my experience is that if you are honest with people, ultimately, they will respond in one of two ways: Either they'll respect you for it and work harder, or they'll leave... and in either case that's not so bad."

When Howard Safir was commissioner of the New York City Police Department, he made a bold move when selecting his first deputy commissioner. The role of the first deputy commissioner is to take over the job of commissioner if he should become incapacitated for any reason. The position requires that the person be able to do the job as well as the commissioner, without interruption or compromise. Safir interviewed all the chiefs in rank order, from the four stars to the one stars. The person he picked was a one-star chief. Safir chose him over all the four stars because he believed in the individual's honor, record, and sense of duty to the job.

This choice resulted in a lot of fallout in the organization. Safir put merit above bureaucratic procedure and threw a wrench in the way of civil service. The other chiefs were angry that this upstart, one-star chief was going to be their boss. But Safir believed that just as the man had won him over with his character and quality, so too would he win over the others.

"Quality is beyond rank," Safir told me. Indeed, the other New York City deputies came to deeply respect the first deputy commissioner—and Safir, for having had the guts to do what he thought was right, despite knowing the decision would be unpopular.

Do all managers prioritize merit over seniority? Unfortunately, it's more the exception than the rule in traditional organizations. Wise leaders are beginning to realize that the people worth recruiting are the ones who come with an urgency to grow without limits.

The daring Herb Kelleher, former CEO of Southwest Airlines, is famous for saying, "Hire for attitude, train for skill." Big difficulties can surface when you hire people with great on-paper skills, but they turn out to have attitude issues. Skills can be learned, but a bad attitude is a personal problem. If that person can't find it within herself to get with the program, she has to be fired.

And by the way, anybody who says "I've fired a lot of people and it's become part of the drill for me" either has no conscience or is a liar. I still get sick the night before I have to fire anybody. But when employees fall short, you must have the courage of your convictions and confront the issue head on. It's difficult to terminate an associate, be it a new colleague or one you've known for years. But you have to do what you have to do. I don't know anyone who is really good at it. But if you can't do it, you risk losing the respect of your top performers. They'll look elsewhere for a level playing field.

Staffers who step up to bat and make it happen every day deserve recognition and above-average compensation for their efforts, regardless of whether the company is in good or bad economic times. Just as you have to have the courage to take out your weak players, you must take care of your great achievers no matter what. If you don't, they'll walk.

Leading is as much about letting go of your people as it is about holding onto them. Give your employees space to personally excel. If they're that good, you need to make them feel as though they are accomplishing big objectives. Over time, if you don't provide your self-motivated achievers a chance to prove themselves, they won't respect your vision—and undoubtedly, they'll move on.

Sander A. Flaum is managing partner of Flaum Partners. He can be reached at sflaum@flaumpartners.com